From the monthly archives:

April 2009

Laguna Niguel Short Sale – Case Study #32

by Vince Bindi on April 5, 2009

Short Sale Case Study #32 -  We will describe another successful Short Sale for a detached home located in Laguna Niguel, Ca.  The details of the short sale such as; property  address, exact loan amounts, and names will not be revealed to protect the privacy of the previous homeowner.

Property and Finance  Details: This Laguna Niguel home was a 4 bedroom, 3 bath, 3 car garage with 3,150 square feet of living area.  This detached home was originally purchased in the Spring of 2004′ for $885,000 with a 10% down mortgage.  In the summer of 2007′ an equity loan (HELOC) was also taken out on the home for about $245,000 with National City Mortgage.   This property was sold via a Short Sale in the winter time of 2009′ by the ShortSalesASAP team.

Market Condition: Home prices have dropped dramatically in southern California due to the severe recession and nationwide financial crisis.  More specifically, prices have been dropping about 1% per month for the past 2.5 years in Laguna Niguel, although there are now signs that prices may be leveling off.   The homeowner experienced a financial hardship and was no longer able to keep current on the mortgage loan payments.   They inquired into a Loan Modification, but even in the most optimistic scenario, they still would have been about $300,000 upside down on their home mortgage.

Preparation Stage: After we signed the listing agreement with the homeowner, we gathered all of the required documents from the homeowner.  After review and packaging, we delivered these documents to the 1st and 2nd banks to present our short sale case.   After some tricky and difficult negotiations, our expert team was able to obtain preliminary approval for the Short Sale with tentative terms and conditions.  During this preliminary short sale approval phase, the homeowner was able to live in the property as normal.  There were no interruptions from other agents or prospective home buyers, and due to their hardship, they were living rent  free.  This Preparation Phase took about 6 weeks to complete.

Sales and marketing Stage: Once the short sale was tentatively approved, we placed this Laguna Niguel property on the market for sale.  It was listed in the Multiple Listing Service (MLS) for a price of at a price of $825,000.   After a period of about 3 weeks with no offers, we dropped the price to $789,000.   A week later we received an offer from a loan qualified buyer for $735,000.    After several days of counter negotiations,  we obtained a purchase price of  approximately $750,000.

Closing Stage: In the final stage of this short sale process, we obtained the signed offer from the Buyer, and gathered the other required Short Sale disclosures and Buyers loan qualification paperwork.  We submitted this  package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs. After some tough negotiations with our specialists obtained the updated short sale approval letter from the 1st and 2nd Mortgage Banks.  Once we received these bank  approval letters, we moved forward with the closing of escrow. The last Phase was completed in about 21 days.

The result was that the entire debt on the home was removed from the homeowner. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments payments.  Most importantly, if this home were to been lost in Foreclosure,  the 2nd Mortgage HELOC loan would still be owed by the homeowner after the 1st mortgage lender foreclosed.  As a result of this short sale though, the convinced to the 2nd Mortgage Bank to accept to small pay-off we generated for them as a settlement in full.     The homeowner is now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to buy again home by 2010′ .

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

San Clemente Short Sale – Success Story #23

by Vince Bindi on April 4, 2009

San Clemente Short Sale Success Story – Case Study #23: Our real estate company, ShortSalesASAP, conducted another successful short sale which we will describe herein.  We will leave out address, names and other private details to protect the privacy of the past homeowner.  This detached home was located in Talega in the Solona tract of  San Clemente, Ca.   This was a 3 bedroom, 2.5 bath with 2 car garage and 1,950 square feet of living area, built in 2001.

This home was purchased by the homeowner in August of 2006′ for $860,000, using a nothing down 80/20 purchase money loan.  The 1st mortgage loan balance was approximately $685,000 and the 2nd mortgage was with Countrywide with an approximate loan balance of $175,000.   The 1st mortgage was a fixed rate loan with Wells Fargo, and the 2nd loan was a variable rate.

San Clemente home prices have dropped about 32% since the height of the market in mid 2006.   California and specifically southern Cal, is being hard hit by the recession and nationwide mortgage loan crisis.   This Talega short sale home also dropped in price by about %35.  Due to the severe recession here locally, the homeowner was experiencing a difficult financial hardship which prevented them from keeping current on the mortgage loans.  They contacted us as a result of a past client reference, to conduct a short sale.

Step 1:  We first gather all of the required documents from the homeowner which includes a simply financial statement, 2 months bank statements, several Pay Stubs, Hardship letter, and bank account balances.  We package this information along with other market data and  present our short sale case to the Banks.   After some hand twisting negotiations with the 1st and 2nd mortgage holders, we got them to preliminary agree to certain short sale terms and conditions.   This Preparation Phase took about 5 weeks to complete.  During this phase,  the property owner lived in the home as usual with no interruptions to their daily lives.   And due to their hardship, they were unable to make their mortgage and lived payment  free.

Step 2:   Once we received preliminary short sale approval, we began the process of  Marketing the property for sale.   This San Clemente home was marketed on the Multiple Listing Service, and also on the Internet but the short sale status was not displayed on any Internet advertising to the public.  The listing price was set at $580,000, which was approximately the market value at that time.     After a period of about 3 weeks, we obtained an  offer from a qualified  buyer for $545,000.   After some back and forth negotiations from our listing Realtor,  we arrived at a price of $555,000.

Step 3:   Once the listing Realtor acquired all of the necessary signatures from the buyer and seller, and reviewed the loan qualification status of the buyer,  we opened escrow.  Our short sale team then packaged the new purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork, and submitted the package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs.

After some tough negotiations with our expert short sale Realtor team, and our attorney, we got both the 1st lender, Wells Fargo,  and 2nd lender, Countrywide, to agree to this short sale offer of $555,000.  Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. This last step was completed in about 21 days.

Final Result:   After the completion of the short sale, and close of escrow, the $860,000 total mortgage debt on the home was retired.   The homeowner was able to rent a comparable home and is saving about $1,400 per month.    The homeowner was able to live in their home during this short sale process and did not make any mortgage payments.   In addition, the homeowners FICO score was not as negatively effected as it would have been if the banks had foreclosed.

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

Aliso Viejo Short Sale – Case Study #29

by Vince Bindi on April 1, 2009

This Short Sale Case Study outlines another successful short sale transaction that was conducted for a detached home located in the Vista De Oro subdivision in Aliso Viejo, Ca.

ORIGINAL PURCHASE:  This large detached home was bought by the homeowner in March of 2007′ for $770,000.  This home was purchase using Zero down financing, and there was a 1st Mortgage with a loan balance of $620,000 and a 2nd mortgage with a loan balance of $150,000.   The fist loan was a fixed rate mortgage and the 2nd loan was an adjustable rate loan.

This single family detached home was 4 bedroom, 3 bath,  2,200 square foot home, with 2 car garage.  This property was sold and closed escrow in December of 2008,  via a Short Sale by the Aliso Viejo  ShortSalesASAP company.

FINANCIAL CRISIS:  Home values have decrease by about 35% since the peak in pricing in Spring of 2006′,  throughout Orange County, CA. and in Aliso Viejo as well.   This Aliso Viejo short sale property dropped in value by about 25? % From the time this home was purchased in 2007′, until it was sold at the end of 2008′.

The homeowner was having financial difficulties and was having a very hard time keeping up with their loan payments.  Their debt to income ratio was to high to qualify for a Loan Modification, and the home was upside down by about $200,000.

SHORT SALE PREPARATION: This Aliso Viejo home was initially put in our Short Sale Preparation Phase. Here we gather all of the required documents from the homeowner and contact the banks to present our short sale case.  With some hard knock negotiations, our expert team was able to obtain preliminary approval for the Short Sale along with terms and conditions.   This Preparation Phase took about 4 weeks to complete.  During that time the homeowner was able to live in the property as normal, with no interruptions from other agents or prospective home buyers, and due to their hardship, were forced to stop making their mortgage payments and lived rent free.

SHORT SALE MARKETING & SALE: the next phase was the  Marketing-Sales of the pre-approved short sale.  The home was marketed heavily and posted in the Multiple Listing Service (MLS) for a price of at a price of $649,000. After a period of about 3 weeks, the price was dropped to $599,900.  We finally found a qualified Buyer and after several counter offers, we were able to get them to offer $580,000 to purchase this home.

CLOSING PHASE: After the purchase offer was signed by the buyer and seller, we opened escrow for the new buyer.  We packaged the purchase offer, Short Sale disclosures and Buyers loan qualification paperwork. We submit the updated package to the 1st and 2nd mortgage banks.  Our post short sale specialist then expedites the delivery of these documents to the bank negotiators to finalize the short sale and obtain the approval letters in writing.

Many people ask us why a mortgage bank would accept a short sale.  Well the reasons are many, but the bottom line is that banks have determined that they loose 15% more when they are foreclose as compared to accepting a short sale.  These savings are due to reducing loss of the time value of money, avoiding property damages, eliminating foreclosure legal expenses, and minimizing bank management overhead expenses.

FINAL RESULT:  At the completion of this short sale, the homeowners mortgage debt was completely eliminated.   The homeowner lived in their home during this short sale process and did not have to make any loan  payments. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was less damaged by the short sale as compared to a foreclosure. In addition, Fannie Mae (FNMA) altered their underwriting policy, so that a past homeowner only has to wait 2 years before they can buy another home using FNMA underwritten loans.  If the homeowner went through foreclosure, the waiting period would be  5 years !

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

Mission Viejo Bank Owned Homes for Sale

by Vince Bindi on April 1, 2009

Bank Owned REO homes are a great buy in today’s Mission Viejo CA marketplace.  The typical bank owned home is selling for 98% of the asking price and are Sold within 17 days on average according to the statistics from the Orange County MLS.   In addition, Bank Owned detached (SFR) homes in Mission Viejo are selling at an average price of $254/SqFt , and bank foreclosure condos are selling at an average of $215/SqFt.

Many of these foreclosure homes need some modest repairs such as paint and carpet, but sometimes needed repairs can be much more.  If you are planning in buying a bank REO home, make sure you are working with an experienced Realtor, and you employ the services of a professional home inspector.  If you are planning on buying a Condo, make sure you check with your mortgage lender to see if the condo tract is approved with FHA, if you intend to use such a loan.

Below, we have listed all bank owned foreclosure homes currently listed for sale in Mission Viejo.  These homes and condos range in price from $129,900 for a 1 bedroom, 1 bath condo, up to $799,000 for a 4 bedroom, 3 bath detached home.  If you would like to see the inside of any of these homes for sale, please feel free to give us a call at:  (949) 388-3396 or drop us an email at: Info@OCBankREO.com

BANK OWNED FORECLOSED HOMES LISTED FOR SALE IN MISSION VIEJO, CA

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